IN a move that illustrates Indian Railways’ (IR) ambitions to establish itself as a manufacturing and export hub for coaches, state-owned Bharat Earth Movers (BEML) was recently awarded a contract to supply IR with 600 LHB coaches within 15 monthse at a cost of Rs 18.9bn ($US 229m). This design was produced specifically for IR in the 1990s by German company Linke-Hofmann-Busch (subsequently taken over by Alstom) for manufacture in India.

With a fleet of approximately 75,000 coaches, including commuter coaches, IR has in recent years pressed the accelerator on coach production. Total annual output from its three manufacturing plants at Kapurthala, Chennai and Rai Bareli has reached 2500 coaches and IR plans to increase this four-fold over the next few years.

Since 2015, IR has been on an aggressive drive to replace conventional coaches produced at the Integral Coach Factory (ICF) in Chennai with LHB coaches. The latter now account for around 60% of IR’s operational mainline fleet of 65,000 coaches.

However, despite IR’s desire to expand its manufacturing base, India's coach manufacturing sector, and the country’s rolling stock industry in general, is facing questions over its ability to sustain high production levels. IR has already placed orders for 100,000 wagons and has also increased electric locomotive orders. From about 1500 locomotives acquired in the previous financial year, IR took delivery of 16,500 in 2024-25.

IR’s attempts to outsource coach production have met with resistance from rail unions, who have raised the question of intellectual property (IP) rights, as ownership of designs remains the property of IR. Fortunately for IR, the BEML order is unlikely to be controversial, as the contractor is a a government-owned company with a strong railway unit.

In collaboration with Korea’s Hyundai Rotem, BEML has previously built trains for the first two lines of the Delhi metro network. IR has also ordered from BEML two prototypes of a 280km/h standard-gauge train for the Mumbai - Ahmedabad high-speed line, now under construction.

BEML is now building a manufacturing facility for LHB coaches at Umaria in the eastern part of Madhya Pradesh state, intending to build 200 coaches there each year. As IR’s efforts to move its own rolling stock production units onto a more commercial footing have been stymied by strong opposition from rail unions, the contract with BEML can be seen as clear attempt by IR to reduce its dependence on these production units.

Furthermore, by working in partnership with BEML, IR hopes that the involvement of global technical partners could bring about innovation in coach design, while a former IR official notes that BEML could circumvent IP issues by building the LHB coaches within an IR facility. “The LHB coach order strengthens the role of BEML as a key player in India's rail manufacturing landscape and aligns with the country's vision of Make in India and Make for the World,” he says.